Telecom Stocks Outlook for the week – 04 to 08.07.2016
(Correction seen after post-Brexit surge)
( www.rupeedesk.in )
The shares of telecommunication services companies are seen
correcting next week after gaining in
the post-Brexit market. Telecom stocks can go for a consolidation
or a near-term correction of
3-4%. Telecom shares this week gained 3.5-7.5% from their previous
week's close, as investors
churned their portfolios, picking stakes in companies which have
little or no exposure to Europe.
We are expecting the downward trend is seen on the charts in line
with expectations for the broader
market. Sector heavyweight Bharti Airtel Ltd may fall to 355
rupees in the near-term, the analyst said.
Resistance for the stock is seen at 372 rupees. Bharti Group
Chairman and Managing Director Sunil
Mittal, according to reports, has said he expects consolidation in
Indian telecom sector over the next
two years that would leave up to four private players and one
state-owned operator in the market.
Mittal is also reported to have said the telecom industry would
face massive erosion of tariffs with the entry of Mukesh Ambani-promoted
Reliance Jio Infocomm. With already lower average voice and data realisation in
the country, Reliance Jio's entry is likely to erode margins for the
incumbents.
Idea Cellular Ltd during its analysts' meet on Monday had
reportedly said the market was large enough to accommodate the new entrant. The
company said it would re-assess its strategy closer to the launch of 4G
services by Reliance Jio.
